Employment Law Reform 2019


In December of last year the Coalition government passed employment law reform which comes into force in the second half of 2019. The reforms will change the dynamic between employers and employees in New Zealand.

Indeed the changes brought about by the Act will operate to restore protections for employees, especially vulnerable employees, and strengthens the role of collective bargaining in the workplace. Many of the changes will be familiar to employers, as they roll the law back to how it was as recently as 2015.

Most changes take effect at two stages. First the day after Royal assent (Wednesday 12 December 2018), and secondly on Monday 6 May 2019.

What changes will occur on May 6 2019?

The right to set rest and meal breaks will be restored, the number and duration of which depends on the hours worked. For example, an eight-hour work day must include two 10-minute rest breaks and one 30-minute meal break, while a four-hour work day must include one 10-minute rest break.

Rest breaks benefit workplaces by helping employees work safely and productively. Employers must pay for minimum rest breaks but don’t have to pay for minimum meal breaks. Employers and employees will agree when to take their breaks. If they cannot agree, the law will require the breaks to be in the middle of the work period, so long as it’s reasonable and practicable to do so.

In this regard matching the intentions of the law with reality can sometimes prove difficult for businesses. A recent example of this has been highlighted in the media around bus drivers. If a bus driver is to receive a rest and meal break but the employer and employee cannot agree on a suitable time then the law will require the meal break to be taken in the middle of the work period.

For passengers aboard a city bus route this could prove most problematic if the bus driver had to stop mid route and passengers were required to wait on board while the driver takes a meal break.

Without detracting from the essential requirement of the bus driver for their right to a meal break this example highlights why it is important for businesses to ensure they uphold good faith relationships with their employees. At its best, a good faith relationship works in tandem to facilitate mutual agreement on the most appropriate time for meal breaks. This, in turn, ensures the least disruption to business production.

Some limited exemptions may apply for employers in specified essential services or national security services.

However, 90-day trial periods will be restricted to businesses with less than 20 employees. This change means the majority of employees will have protections against unjustified dismissal from when they start a job.

Businesses with 20 or more employees can continue to use probationary periods to assess an employee’s skills against the role’s responsibilities. A probationary period lays out a fair process for managing performance issues and ending employment if the issues aren’t resolved.

Employees in specified ‘vulnerable industries’ will be able to transfer on their current terms and conditions in their employment agreement if their work is restructured, regardless of the size of their employer.

Changes also include a longer notice period for employees to elect to transfer to the new employer; this notice period is a minimum of 10 working days.

The duty to conclude bargaining will be restored for single-employer collective bargaining, unless there are genuine reasons based on reasonable grounds not to. This ensures that parties genuinely attempt to reach an agreement.

The 30-day rule will be restored. This means that for the first 30 days, new employees must be employed under terms consistent with the collective agreement. The employer and employee may agree more favourable terms than the collective. Pay rates will need to be included in collective agreements, along with an indication of how the rate of wages or salary payable may increase over the agreement’s term.

Employers will need to provide new employees with an approved active choice form’ within the first ten days of employment and return forms to the applicable union, unless the employee objects. The form gives employees time to talk to their union representatives before considering and making a choice about whether to join a union or remain on the individual employment agreement.

Employers will need to allow for reasonable paid time for union delegates to undertake their union activities, such as representing employees in collective bargaining. Employees will need to agree with their employer to do so or, at a minimum, notify them in advance.

An employer will be able to deny the request if it will unreasonably disrupt the business or the performance of the employee’s duties.

Employers will need to pass on information about the role and function of unions to prospective employees. Unions must bear the costs if they want printed materials to be passed on.

From 1 April the Domestic Violence Victims Protection Act 2018 provides employees affected by domestic violence a right to request a short term (two months or less) variation of their employment arrangements to help them deal with the effects of domestic violence. After six months of employment with their employer employees may also take up to 10 days paid domestic violence leave.

If you have any query relating to the upcoming employment law changes and how these might affect your business or indeed on any other legal matter please do not hesitate to contact us to organise a time or to just discuss your matter over the phone.